Brookings Institution: Toledo economy improving

The Toledo Metropolitan Area is showing promising signs of economic improvement, according to a report released by the Brookings Institution, a think tank based in Washington D.C.

The Export Nation report, released March 8, analyzes and documents the American growth rate of exported goods and services in 2010. The report states that U.S. export sales grew by more than 11 percent back in 2010 — the fastest export growth since 1997 — and the growth is expected to continue.

In 2010, the largest 100 metro areas produced approximately 65 percent of U.S. exports, 75 percent of the nation’s service export sales, and 63 percent of its manufacturing export sales.

Those same 100 metro areas were responsible for the majority of export sales in thirty states. The Brookings Institute noted that the Midwest metro areas generated the fastest growth in direct export-production jobs.

Toledo’s own export growth increased by 17 percent from 2009 to 2010 and is now ranked third among the nation’s top 100 metro areas for export growth. Toledo’s exports totaled $4.1 billion in value, which places the metro area (consisting of Fulton, Lucas, Ottawa, and Wood counties) at the 58th ranking for exports value.

Brookings also placed Toledo in the top ten metro areas for the city’s 15 increase increase in export share of metro gross domestic product (the overall market value of final goods and services) in 2010. This increase in exports is projected to double by 2015.

The statistics and economic terminology might sound confusing, but there is one change in the Toledo area that everyone can understand and appreciate: the likelihood of more jobs. Toledo’s metro exports accounted for over 11,000 jobs in 2010 that are directly related to the exporting industry and 25,600 more that are supported by it. If the area’s exports continue to climb, then more jobs will be created.

What is the cause of this significant export growth? Toledo’s work ethic for one, says Paul Zito, Vice-President of International Development for the Regional Growth Partnership.

“When you have a good workforce, you have a good product,” Zito said. “There is a unique economic diversity in Toledo that maintains strength in both the old, automotive industry and the new industry of renewable energy. Many of the other metro areas do not have that kind of diversity.”

Paul Zito also believes that new international markets for northwest Ohio’s exported goods and services have contributed to the growth. Regional Growth Partnerships already have several plans to help small business owners enter those export markets.

Although Canada and Mexico continue to be the largest markets for American exporters, a rising interest in other foreign countries could also mean better business.

“From 2003 to 2008, the share of U.S. exports going to Brazil, India and China increased by 3 percentage points and by another 2 percentage points in just the two years from 2008 to 2010,” the Export Nation report states. “Metropolitan areas that produce what emerging markets consume are better-positioned to take advantage of the growth in these countries.”

The industry with the highest share of metro exports in Toledo is for transportation equipment with a 23.5 percent share of metro exports and a 36.4 percent growth increase between 2009 and 2010. Several other industries in Toledo have flourished; Machinery has grown by 22.7 percent, fabricated metal products by 23.1 percent, and paper by 25 percent just to name a few.

“Innovation, as part of the new economy, derives predominantly from research and development, which occurs at our area’s major universities and colleges and businesses,” Cunningham wrote in response to the report. “Innovation and technology transfer from the research and product developments that have occurred at The University of Toledo’s Clean and Alternative Energy Incubator and Bowling Green State University’s Center for Research and Development. Among the several initiatives, the universities have impacted innovation and growth expansion in the area.”

Education is one of the U.S. service exports that has increased nationally in both 2009 and 2010, but not in Toledo. According to the Export Nation report, Toledo’s Education service exports have decreased by nearly 18 percent.

“This may serve as a warning signal for state and local policy support,” Cunningham argues. “A strong indicator of an area’s economic strength is its citizens’ education attainment. Furthermore, education combats poverty as a tool to loosen its vice, in Toledo specifically, as problem-solvers address the challenge of one of the nation’s highest poverty-ridden cities. Education is an opportunity to advance the economic climate the new economy is ushering.”

The 2010 decrease in growth for Education could be the result of several factors, such as fewer students. Despite its recent decline, the Education industry remains resilient. Cunningham discovered in the Bureau of Economic Analysis of the 2010 fourth quarter that the universities and medical facilities in Lucas County displayed high exportability for education services and were specialized more in that particular area.

The Travel and Tourism Industry in the Toledo metro area has grown by nearly 9 percent, which could also indicate a developing interest in the area’s education institutions.

According to Taron Cunningham, now is the time for businesses to take action. “Things are going well. It’s okay to spend. Let’s continue to boost the economy of our area.”

The Export Nation 2012 report can be accessed through the Brookings Institution website: www.brookings.edu. An interactive map of each state’s export data is also available.

This entry was posted
on Thursday, March 22nd, 2012 at 11:16 am and is filed under Toledo Business Link.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.